President Trump’s Plan to Take Back Funding from the Children’s Health Insurance Program
May 29, 2018
Just as supporters of the Children’s Health Insurance Program (CHIP) thought they could relax after the popular health insurance program was renewed for ten years with bipartisan support, Congress is again threatening to cut funding. This past winter, months after federal CHIP funding expired, families waited nervously as funds began to run low and states started to send out notices to families, warning them of the possible end of the program. At the eleventh hour, funding for the program was approved, and families across the country let out a collective sigh of relief.
Now, however, there is a new threat to CHIP. Last week, the Trump administration sent a request to Congress to begin a rescissions process. This is something that hasn’t been done since President Clinton, and is a bit complicated. At the President’s request, Congress has 45 days to take back money they previously allocated. They need to pass this by a majority vote, but they also have the option to not take back any of the money.
President Trump’s rescission request asked Congress to take back $7 billion from the CHIP program, along with money from some other social safety net programs, including housing. Some of the money (around $5 billion) is money that had been given to the states but was not spent. In programs like CHIP, more money is given to the states than what is expected to be needed, in case of increased expenses and these extra funds are usually re-appropriated to other health and human services programs if they are not used.
The other $2 billion is money that is set aside in what is called a contingency fund. This is money that can be used in the case of an emergency, like a natural disaster, or Congress failing to fund the program in a timely manner. Last winter, this was the fund that was used to help ensure kids in the program continued to have coverage while Congress stalled on funding the program.
White House officials argue that the money is unlikely to be used, and wouldn’t take healthcare away from kids. However, without the contingency fund last year, millions of children would have lost healthcare coverage. And while some of the money has not been used, it has traditionally been absorbed back into other healthcare programs that need it.
Instead, this funding President Trump requested to have taken away from CHIP will be used to drive down the deficit caused by last fall’s $1.3 trillion tax cut. After giving tax breaks to millionaires, Congress has faced pressure on the huge deficit it created and decided to try and decrease the deficit by taking money from CHIP. While the rescission package isn’t guaranteed to take healthcare away from children, the damage this will do is enough to make families nervous. After last winter’s unfortunate CHIP battle, families deserve peace of mind about their children’s health insurance, not further cuts to undo the damage caused by tax cuts for millionaires.